Novel Strategy Puts Big Soda Tax Within Philadelphia’s Reach

Philadelphia is poised to become the first large American city to pass a soda tax.

If the measure passes a final vote next week, as it is expected to do, it will impose a tax of 1.5 cents for every ounce that includes sugar or artificial sweeteners — about 30 cents for a 20-ounce drink or $2.16 for a 12-pack. On Wednesday night, it was passed on a voice vote by the City Council’s “committee of the whole,” which includes the entire council.

Soda taxes have usually been proposed as public health measures to discourage people from drinking sugary beverages, which have been linked to obesity, diabetes and tooth decay. They have been introduced in cities around the country, including twice before in Philadelphia, but repeatedly failed. Berkeley, Calif., is the only American city with a tax on sugary drinks; the Philadelphia tax would be considerably higher.

Mayor Jim Kenney’s original proposal was to tax sugary drinks at 3 cents an ounce, a rate that would have doubled the price of many sodas. Aware of the political challenges, he tried a novel strategy to promote his tax. Instead of selling it as a nanny state measure meant to make the city healthier, he presented it as a big untapped source of revenue that could be used to pay for popular initiatives, including expanded prekindergarten, and renovations of city libraries and recreation centers.

That choice appears to have paid off, but it may come with some consequences. Because the measure was cast as a revenue-raiser, the final deal is not exactly what public health experts might prefer. Council members, in negotiations, altered the spectrum of taxed products to hit budget targets. The measure that passed Wednesday taxes not just sugary drinks but also diet drinks. It exempts juice drinks from the tax as long as they have 50 percent juice, even if they also have added sugar. Minutes before the final vote at 8 p.m., the city’s finance department revealed that some soda-tax revenue would also be used to plug a budget shortfall.

“It was always about the revenue,” said Lauren Hitt, Mr. Kenney’s spokeswoman, who said the mayor was comfortable with the council’s modifications to the proposal, which were negotiated into the evening.

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Opponents of the soda tax included members of the Teamsters union, like Danny Grace, center.CreditCharles Mostoller for The New York Times

Other cities have been tracking Philadelphia’s proposal. San Francisco; Boulder, Colo.; Oakland, Calif., and several smaller communities are planning to introduce soda tax measures this year.

“There has been much discussion around the world and within the U.S. to adopt soda taxes,” Kelly Brownell, the dean of the Sanford School of Public Policy at Duke University, and a soda-tax advocate, said in an email. “Philadelphia has now created an entirely new level of momentum.”

Unlike Berkeley, Philadelphia is a city with a large poor population and high soda consumption. That means that, if the soda-tax advocates are right, it could have a measurable public health benefit. Soda consumption in Berkeley was very low even before the tax there passed. In Mexico, which passed a national soda tax, consumption of sugary drinks fell substantially in the measure’s first year, particularly among the country’s poorest shoppers.

Darrell Clarke, the City Council president, had strongly opposed earlier soda tax measures, but helped negotiate the final deal this time. He opened the committee hearing by warning: “The action we take will probably leave some people with a sour taste in their mouth.” Asked after the vote how other cities might look at soda taxes, he said, “I think there will be a strong conversation.”

Some City Council members felt uncomfortable with the possible regressive nature of the soda tax. Poor people tend to drink more sugary drinks than higher earners. The decision to include diet drinks was an effort to spread the tax burden up the income scale. If consumption patterns don’t change, then the tax would still burden poor Philadelphians more, since drinks make up more of their income. But the evidence from Mexico suggests they may instead choose to buy fewer beverages.

The proposal faced substantial opposition from the beverage industry, the Teamsters union and local grocers. Together, the anti-tax forces spent millions of dollars on advertisements and lobbyists. Opponents of the tax held a rally outside City Hall in the morning, and chanted and booed during public testimony on the measure. It is possible that the industry will bring lawsuits challenging the tax once it has passed.

Supporters were also well organized; they, too, raised and spent substantial sums. They assembled a group of preschoolers at City Hall for a “read in” Wednesday, and packed the council gallery bearing handwritten signs. When the vote was over, they cheered and applauded.

Correction:

An earlier version of this article misstated the day the vote took place. It was Wednesday, not Tuesday.